What overseas financier in his or her right mind would make a major infrastructure investment in a country that's demonstrated it cares nothing for the rule of law and will yank away ownership at the drop of Putin's hat?
OAO Russian Railways said plans to sell a minority stake to an outside investor could complicate government plans for a capital injection aimed at funding infrastructure upgrades prior to the 2014 Winter Olympics.
A state equity increase would dilute the 5 percent holding Russian Railways plans to auction in advance of a wider privatization, and legislation may be needed to solve the issue, Chief Executive Officer Vladimir Yakunin said in an interview.
“Any change of the ownership capital should occur after very serious changes in the Russian law,” Yakunin, who opposes plans for a sale as early as next year, said in Paris. Under current legislation a minority investor could decline to boost its holding in tandem with the government, eliminating share capital as an option for funding Olympics-related work, he said.
The 2014 Games are to be held in Sochi on the Black Sea, with alpine events staged in Krasnaya Polyana in the western Caucasus Mountains. Related infrastructure projects include a high-speed link from Moscow to Adler, where the local airport is located, and a metro line between Sochi, Adler and the ski area.
Russian Railways has also ordered 38 trains worth 410 million euros ($535 million) from Siemens AG for use during the Olympics, plus options for 16 more to be partly built in Russia.
Possible investors in Russian Railways would include private buyers and possibly overseas participants, the CEO said. Economy Minister Andrei Belousov had said on Nov. 30 that a domestic pension fund was the most likely buyer for the pilot stake, which the government plans to make available in 2013 prior to selling off a 25 percent holding by the year’s end.
“I don’t know whether it will be a pension fund,” Yakunin said. “It can be a private businessman or foreign participant.”
The CEO last month called for a delay of four to five years in any sale of a stake in the company.
With assistance from Ekaterina Shatalova in Moscow. Editors: Chris Jasper, Torrey Clarke. To contact the reporter on this story: Mathieu Rosemain in Paris at firstname.lastname@example.org. To contact the editor responsible for this story: Chad Thomas at email@example.com.